Correlation Between VICI Properties and First Industrial

Can any of the company-specific risk be diversified away by investing in both VICI Properties and First Industrial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VICI Properties and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VICI Properties and First Industrial Realty, you can compare the effects of market volatilities on VICI Properties and First Industrial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VICI Properties with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and First Industrial.

Diversification Opportunities for VICI Properties and First Industrial

0.88

Correlation Coefficient

VICI Properties  First Industrial

Very poor diversification

The 3 months correlation between VICI and First is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and First Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Industrial Realty and VICI Properties is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VICI Properties are associated (or correlated) with First Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Industrial Realty has no effect on the direction of VICI Properties i.e., VICI Properties and First Industrial go up and down completely randomly.

Pair Corralation between VICI Properties and First Industrial

Given the investment horizon of 90 days VICI Properties is expected to under-perform the First Industrial. But the stock apears to be less risky and, when comparing its historical volatility, VICI Properties is 1.1 times less risky than First Industrial. The stock trades about -0.14 of its potential returns per unit of risk. The First Industrial Realty is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  5,630  in First Industrial Realty on September 19, 2024 and sell it today you would lose (426.00) from holding First Industrial Realty or give up 7.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

VICI Properties  vs.  First Industrial Realty

VICI Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

First Industrial Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Industrial Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with VICI Properties and First Industrial

The main advantage of trading using opposite VICI Properties and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties position performs unexpectedly, First Industrial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Industrial will offset losses from the drop in First Industrial's long position.

The idea behind VICI Properties and First Industrial Realty pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.